INTER RAO Lietuva Group announces financial results for 1Q 2022

• Revenues from sales in 1Q 2022 decreased by 17.7 per cent y/y to EUR 100.7 million due to lower volume of electricity sold especially in the Latvian market.
• Group’s gross profit on sales increased to EUR 12.0 million, versus EUR 9.5 million in 1Q 2021.
• Consolidated EBITDA increased to EUR 11.3 million from 9.4 million in 1Q 2021, while the EBITDA margin reached 11.2 per cent, compared to 7.7 per cent a year ago.
• Operating profit increased to EUR 8.6 million, versus EUR 7.6 million in 1Q 2021.
• Group’s net profit stayed at the same level and amounted to EUR 7.9 million.
• The net profit margin increased from 6.5 per cent a year ago to 7.8 per cent in the reporting period.
• The Group has been affected by some of the risk factors, described in the Company’s prospectus.

About securities traded on regulated market

On March 17th  the suspension of trading of Company’s shares was announced by the Warsaw Stock Exchange. More information here: https://www.gpw.pl/suspension-and-removal .

Company’s prospectus, dated 23 November 2012 (hereinafter – the “Prospectus”) contains a list of risk factors the investors have to consider before investing into the shares of the Company, among them, and without limitation, that the operations of the Group are exposed to geopolitical risk that may have an adverse material affect on the business of the Group. Current geopolitical situation already has an effect on the operations of the Group, i.e. (i) TGE suspended operations of the Polish Subsidiary on the Commodity Market of TGE due to the risk of the Polish Subsidiary being covered by generally applicable sanctions regulations, including those referred to in the Trading Regulations of the Commodity Market of TGE; and ii) by the decision of Minister of the Interior and Administration of Poland certain sanctions were applied with respect to the Polish Subsidiary, because the Polish Subsidiary was recognized as indirectly related to Igor Ivanovich Sechin (Igor Ivanovich Sechin) who is subject to EU Sanctions.

While the Company is not subject to restrictive measures imposed by implementing EU Sanctions (Igor Ivanovich Sechin neither has any ownership in nor control over the Company), activities of the Group and especially transactions with INTER RAO UES became subject to the increased scrutiny by the authorities and financial institutions, and the Company may not eliminate the possibility that risks related to implementation of EU Sanctions may have material adverse affect on the business of the Group.

Nevertheless, the Company does not possess any information on restrictive measures imposed on the Company or its subsidiaries by implementing EU Sanctions or individual sanctions imposed by the United States Department of the Treasury Office of Foreign Assets Control.

Key figures of IRL Group

Revenue from sales

The total consolidated sales revenue in January-March of 2022 was equal to EUR 100.7 million, 17.7 per cent less than in the first 3 months of 2021. The total revenue decrease mainly was caused by a lower amount of electricity traded in the Latvian market.

The market price of electricity was higher, compared to the same period in 2021, in all markets.

Earnings

As a result – the Group’s gross profit increased by 19.5 per cent, compared to the same period a year ago, and the Group’s gross profit margin reached 11.91 per cent in the reporting period, compared to 7.76 per cent in the period January-March of 2021.

The Group’s operating profit increased by 14.3 per cent, compared to the same period a year ago and was equal to EUR 8.6 million.

In segment breakdown, the core electricity trade segment’s operating margin increased by 1.9 percentage points y/y, to 7.98% in 1Q 2022. The power generation segment witnessed an increase of revenues and operating profit, as the Vydmantai wind power plant produced more electricity compared to the same period a year ago due to better meteorological conditions: average wind speed in the 1st quarter of 2022 was 7.2 m/s compared to 6.2 m/s a year ago. As a result of this, the segment’s contribution to the Group’s operating profit increased to 8.1 per cent in 1Q 2022 from the exceptionally low 2.3 per cent a year before.

Operating results by segment

The Group’s net profit in January-March of 2022 stayed at the same level y/y and was EUR 7.9 million. The profit margin increased from 6.5 per cent a year ago to 7.8 per cent in the reporting period.